Running your business online is one thing&#151making sure your Web applications are running the way they should calls for an entirely different set of software.

AIM Funds Management, a mutual fund company, developed online investment tools to help in the battle to attract and retain customers during the stock market downturn. The service—designed for financial advisors to work with clients—could have become a liability, though, if the site crashed under heavy usage. But the company says its use of test and measurement software helped it to preserve its stellar reputation.

"We consider our Web site and our tools to be a critical advantage in the market," says Andrew Boyd, lead application engineer at AIM Funds Management, a division of British-based investment giant Amvescap. "As such, we've established baselines that we need to be constantly measuring our performance against."

The business challenges outlined by Boyd are typical of the drivers behind a burgeoning market for test and measurement software. While the category falls under a number of headings, including automated software quality tools (ASQ), the products basically can be grouped into three baskets: tools for testing applications before they go into production; tools for tuning applications as they're being deployed; and tools for measuring, monitoring and maximizing performance after deployment.

While the industry was hurt by the economic downturn and technology implosion of 2001, IDC analyst Richard Heiman says the market still managed to achieve a modest gain of 2.7%, reaching $1.1 billion in worldwide revenue last year. Prior to 2001, the market was soaring at a 20% annual revenue growth rate. IDC expects the market to be robust this year, reaching $1.23 billion, or a 10.5% growth rate.

Heiman believes that the biggest piece of the market going forward will be in testing and measurement software specifically for monitoring distributed environments such as Web servers. That market, valued at $610 million in 2001, will reach $2 billion by 2006, a compound annual growth rate of 26.3%.

There are more than a dozen vendors vying for a piece of that market, including some of the enterprise systems management giants such as Computer Associates, IBM and Hewlett-Packard. However, the leader at the moment is Mercury Interactive of Sunnyvale, Calif., with half of the worldwide market, according to IDC. While Mercury has a substantial lead—its next closest competitor is Rational with 25% market share—Mercury will increasingly have to fight off competition from players in the enterprise systems management market. BMC Software, which has four times the revenue of Mercury, is making a play for the space with such products as SiteAngel. For now, however, BMC isn't even on IDC's radar for this category of tools.

Contributing EditorMel Duvall is a veteran business and technology journalist, having written for a variety of daily newspapers and magazines for 17 years. Most recently he was the Business Commerce Editor for Interactive Week, and previously served as a senior business writer for The Financial Post.